Hodgepodge for Week of August 24, 2026: Deportation, Head Start, LGB v. T, Occupational Licensing

It's been a busy week for me, but there is still plenty going on in the world. I don't have the time to give it the full treatment, but I still want to get at some stuff that is going on. 

The cost of mass deportation: Earlier this month, the Left-leaning Economic Policy Institute (EPI) released a deportation calculator and estimated that the government is going to spend $268.9 billion. I don't see eye to eye with EPI on a lot, but I agree that money could be spent on a lot of better things than deportation. As I pointed out in 2024, mass deportation is enormously expensive, disrupts the labor force and economy, raises prices, and ultimately imposes substantial costs on everyday Americans. 

The costs of Head Start's regulatory micromanagement: The Competitive Enterprise Institute (CEI) covered a recently proposed rule about cutting the red tape in Head Start. Head Start is the federal program that provides early education services and related services to lower-income children. HHS proposes to save as much as $2.2 billion with its deregulation. CEI covers the examples of staff-to-child ratios, family service caseloads, and mandatory bus monitors to illustrate how Washington micromanages local programs with costly rules that lack evidence that they work. 

LGB divorcing from the T: The Log Cabin Republicans, which represents the lesbian, gay, and bisexual (LGB) of the Republican Party, has announced that it will no longer advocate for transgender rights. Part of this divergence is due to such issues as radical gender ideology, biological men in women's sports, and gender reassignment surgery on minors. I find this to be a welcomed change given the extremeness of the trans activists. 

In 2024, I wrote a two-parter on this topic. The first part was about how the alliance between LGB and T did not make sense, in no small part because each group has different characteristics and goals. The second part was about how bringing the transgender activism and gender ideology are harming LGB individuals. I hope this trend extends beyond the Log Cabin Republicans. 

Occupational licensing: Back in 2014, I wrote about the perils of occupational licensing and how it is a harmful barrier to entry in multiple jobs, whether it is a florist, dentist, hair stylist, or a nanny. I also came across corresponding research in 2018 showing how costly it is and how it adversely affects the labor market. The Archbridge Institute has released its latest State Occupational Licensing Index. The bad news is that 20 percent of Americans are subject to occupational licensing. But there is some good news. One, there are fewer occupations that have occupational licensing. Two, more states are passing universal licensing recognition laws. Three, the licensing variation reminds us that this burden is not inevitable. 

Why Restricting International Students Is Trump's $481 Billion Mistake

There are a number of features that make the United States a unique and exceptional country. One of those drivers of American innovation has been that it has attracted ambitious people around the world, which means having an immigration policy open enough to allow them to work and live in the United States. America has historically understood that importing talent is one of the best investments it can make, but the current administration has lost sight of that concept. 

As I pointed out earlier this year, the Trump administration has attacked legal immigration to the United States. One of those foci of attack has been restricting international students to study in U.S. universities. The Trump administration asserted that foreign adversaries have exploited American universities to steal sensitive research and technology and that stricter visa screening was needed to safeguard U.S. interests.

Whether these restrictions ultimately improve national security remains difficult to measure. What is much easier to estimate, however, is their economic cost. A recent study from the Peterson Institute for International Economics estimates that restricting international STEM students could reduce U.S. GDP by as much as $481 billion over the next decade.

The reason for this decline in GDP is intuitive. The mechanism is fairly intuitive. International STEM students don't simply earn degrees. They become part of America's innovation ecosystem. Many stay to work in research labs, high-tech firms, and startups, where they help develop new products, improve existing technologies, and increase productivity throughout the economy. 

By reducing the number of these future innovators, restrictions shrink the pool of human capital that drives long-term economic growth. The projected GDP loss is therefore not an accidental correlation, but the estimated value of the discoveries, companies, and productivity gains that never materialize.

This immigration restriction especially hits hard for the science, technology, engineering, and mathematics (STEM) industry because as the PIIE study points out, 35 percent of all STEM workers with a PhD are foreign-born and U.S.-trained.

Scientists and engineers develop new products, improve manufacturing processes, write software, discover medical treatments, and launch companies that employ thousands of people. These innovations make workers across the economy more productive, which is ultimately what drives rising incomes and long-term economic growth. International STEM graduates have played an outsized role in America's innovation economy for decades. Restricting their numbers reduces the number of future breakthroughs that make the entire U.S. economy more prosperous.

Ironically enough, these restrictions can actually undermine the President's rationale for the restrictions. Economic strength is one of the foundations of national security. A larger, more productive economy generates greater capacity in research, development new technologies, and gives the United States the resources needed to maintain a technological edge over its rivals. 

Policies that reduce innovation therefore carry national security costs of their own. Restricting international STEM students may prevent some security risks, but it also reduces the supply of scientists and engineers who drive economic growth. If America becomes less innovative, it also becomes less capable of sustaining the military and technological superiority that has underpinned its security for decades.

The irony is that policies intended to protect American workers and strengthen American security can end up undermining both. In an effort to protect America, policymakers risk reducing the very economic dynamism that has made America powerful. STEM students do not simply compete for jobs. They create knowledge, launch companies, and develop technologies that make the entire economy more productive. Restricting their ability to study in the United States means fewer innovations, fewer businesses, and less economic growth.

Restricting international STEM students risks sacrificing one of America's greatest strategic assets: its ability to attract talented people who create new ideas and technologies. In addition to economic implications, it harms national security because it risks reducing the innovation and technological leadership that make the United States secure in the first place. This is yet another reminder that protectionist policies have this uncanny ability to limit economic freedom and American prosperity at the same time.

When Housing Meets Immigration: Is the Swiss Referendum Capping Its Population Asking the Wrong Question?

Next week, Swiss voters are going to head to the ballot box to decide whether to cap the Swiss population at 10 million by 2050. Supporters of immigration caps can often be presented as Far Right, fearful, and parochial. I have felt this way in a U.S. context. But then I have to remind myself that the U.S. and Switzerland have two different contexts. Switzerland does not even have the integration issues that many of its European neighbors have. This is in part that Switzerland is able to integrate its immigrants better because they mainly come from countries like France, Italy, and Germany. Although the primer on the initiative lists Islamic culture as a reason, the main reasons for the Swiss ballot is a combination of housing and infrastructure strain.

In 2014, I expressed concerns about a similar Swiss referendum for a quota on immigration. Switzerland's immigration quota was a self-defeating policy because immigration is driven by labor demand and it is empirically shown to strengthen employment and economic performance. Less immigration means less economic output and less revenue. 

But I keep coming back to the housing component. In the United States, J.D. Vance wrongfully blamed housing affordability on immigrants. In the U.S. case, it is true that immigrants consume housing, but they also disproportionately build housing, so much so that stifling off the construction labor with strict immigration policy makes matters worse. I cannot help but think that something similar is going on here. It seems like Switzerland is trying to solve a housing problem with immigration policy. 

On the one hand, Zurich has made strides by boosting housing supply by 9 percent with upzoning. On the other hand, only land inside designated "building zones' can be developed, and done so over a 15-year demand rule (Swiss Spatial Planning Act [RPG], Article 15). The RPG also has agricultural zoning laws that further limit sprawl (Art. 16) to construct more housing. On top of that, each canton has their own zoning regulations and permitting rules that get in the way of housing construction. 

The Swiss case against immigration is not reactionary restrictionism. Switzerland faces housing and infrastructure strains. At the same time, Swiss housing scarcity is not occurring in a vacuum. The land use restrictions, zoning regulations, and permitting laws fundamentally limit Switzerland's housing supply. If this referendum passes, Switzerland will be treating a housing supply problem as a population problem, and will be doing so to its own detriment. 

You Can't Deport Supply and Demand: How ICE Enforcement Contributes to Labor Shortages

For years, advocates of mass deportation insisted that aggressive immigration enforcement would strengthen the economy and help natives born in the U.S. find a job. The theory is that you remove enough workers, somehow businesses, customers, and local economies adjust without any pain. Beyond this political rhetoric begs an important empirical question: what actually happens to labor markets when Immigrant and Custom Enforcement (ICE) enforcement increases? Is ICE actually making the labor market better? A recent paper from the National Economic Bureau of Research (NBER) using data from areas affected by immigration raids and related enforcement policies. 

Instead of relying on simple "before-and-after" comparisons, the author of this NBER paper use regional differences in ICE enforcement to examine how labor market outcomes diverged over time. One of the big conclusions is that greater ICE enforcement led to less employment for undocumented workers. But the effects did not stop there. The study found little evidence that this enforcement helped native workers. Meanwhile, businesses with immigrant-heavy sectors experienced labor shortages and operational disruption. The fact that this study compared changes across regions, as opposed to simple national trends, provides a stronger analysis than a basic correlation analysis.  

Broader economic literature on immigration explains why this NBER study's findings are unsurprising. Despite the political rhetoric of immigrants taking jobs from native-born workers, economists have found very little evidence that immigration substantially reduces native employment overall. If that claim were true, we would have seen ICE enforcement generate clear increases in employment opportunities for native workers. Yet no such clear increase emerged in the study. As a matter of fact, the study points toward labor-market disruption and spillover effects. 

That is because the economy is not a fixed pie. Economic literature already indicates that immigrants are often complements rather than simple substitutes for native labor. In industries such as housing construction, hospitality, agriculture, and food processing, different categories of workers frequently depend on one another to maintain production. Removing that part of the workforce can and does reduce productivity and labor demand elsewhere in the economy. 

There is also evidence that immigrant workers can increase wages for native workers. That is because immigrants are not only workers competing for jobs. They are also consumers, renters, entrepreneurs, and customers. When policymakers treat the labor market like a fixed pie, they ignore this high level of interconnectedness. 

It is that level of interdependence that makes these findings unexpected. Large-scale immigration enforcement acts as a supply shock. That shock propagates throughout supply chains and affects firms, consumers, and workers beyond the targeted population of the mass deportation. The fact that the pro-mass deportation argument is based in a simplistic view of the economy is part of why I was against mass deportation in 2024. 

None of this determines the question of how much immigration enforcement is appropriate. What it does show is that mass deportation is not costless or uniformly beneficial. While "deport them and it will work out" is a snazzy political slogan, it still does not repeal arithmetic or basic laws of economics.

Trump's Assault on Legal Immigration and Why the "Immigrants Should Come the Right Way" Argument Falls Short

During his 2024 presidential campaign and throughout his second term, President Trump's rhetoric on immigration has been framed around border control and illegal immigration. On the surface, he was about unauthorized entry, strengthening the border, and concerns about crime and lawlessness. In that respect, his response was straightforward: get illegal immigration under control. 

Those who self-identify as anti-illegal immigration have this common story to tell: illegal immigration is the problem, legal immigration is the solution, and anyone willing to "come the right way" has a door open to them. Too bad that the data does not support that narrative! The latest research from the Cato Institute shows that since the beginning of Trump's second term, legal immigration has be cut about 2.5 times more than illegal immigration. 

How is this possible? I thought Trump just wanted to go after the lawbreakers. One complicating factor that Cato points out is that border apprehensions were dropping by 80 percent in Biden's last year. In spite of what some might think, Biden actually tightened up border security at the end of his term. This helps explain why Trump cannot get the big mass deportation numbers that he was hoping for. 

With immigration being such a hot-button issue and Trump being so gung-ho on the matter, he grabbed for whatever policy levers he could. As I explained a couple of years ago in my argument against mass deportation, mass deportation involves detecting, detaining, and deporting individuals. Especially with how resources-strapped the U.S. government is to carry out mass deportation of every illegal immigrant, reducing illegal immigration is more operationally constrained. In contrast, the federal government has many levers on the legal immigration front:

• One I discussed last year was the $100,000 fee for the H-1B visa. That fee contributed to H-1B visas falling by 25 percent. 
• In 2025, the Trump administration eliminated the CBP One scheduling app and banned asylum, which is why asylum seekers entering legally dropped by 99.9 percent.
• With refugees, the Trump administration put a cap on refugees at 7,500. During the Biden administration, the cap was at 125,000 refugees. As a result, the number of admitted refugees declined by 90 percent. 
• Due to a visa ban on 75 countries, immigrant visas for permanent visas fell by about half, and visas for fiancé(e)s and spouses fell by 65 percent.
• As for international student visas, Trump used an executive order to cancel about 1,700 and 4,500 student visas, which contributed to a decline of 40 percent in F-1 visas.

Taken together, this shows that legal immigration is being affected through multiple entry ways simultaneously, whether that is work visas, asylum processing, refugee admissions, family-based visas, and student visas. The tools differ, but the result is the same: fewer legal entries into the United States. 

Sadly, this is not a new development. As I pointed out in 2018, Trump targeted chain migration, the Temporary Protected Status (TPS) program, DACA, low-skilled immigrants, and high-skilled immigrants on the H-1B visa during his first term. The current situation and the past act as a reminder that the U.S. immigration system is not a single, orderly queue, but a patchwork of pathways that each have its own constraints, caps, and eligibility criteria.

I want to bring this to something even more important, which I covered in 2023. Back then, the Cato Institute released a report showing how 99.4 percent of immigrants had no legal realistic legal avenue to do so, in no small part due to the complexity of the immigration system. Remember that 2023 was during the Biden administration, which was relatively more friendly towards immigrants. With all of these bans and caps from the Trump administration, the implication is very difficult to escape: the path to legal immigration to the United States is rapidly vanishing and next to impossible. 

Trump said that he will welcome those who come into the U.S. legally. However, it does not matter what his stated intent is. His policies have considerably restricted legal immigration to the U.S. In practice, telling immigrants to "wait in line" and "come in the right way" rings hollow when the Trump administration's actions actively constrain the queue as much as humanly possible. It makes the American Dream into less of an achievable goal and more of an empty slogan that is detached from reality and borders on the farcical. Meanwhile, would-be immigrants across the world are expected to wait in a line that mostly takes them nowhere except deeper in debt with all the processing fees in an effort towards futility. 

Europe's Asylum Dilemma and Why Return Hubs Are a Second-Best Immigration Policy

I have spent a lot of time here at Libertarian Jew discussing immigration policy. In concept, I believe that immigration should work more like free trade: people moving across borders, creating value, and making both sides better off through voluntary exchange. In a U.S.-specific context, I still believe in that ideal that immigration is welfare-enhancing. However, that framework is not unconditional or universal. I have serious reservations about that ideal with regards to Europe because of what is observable in that part of the world. I examined this topic of integrating immigrants in Europe at length last December. 

What I discussed in December were a few things. One was that the influx of Muslim immigrants that hold illiberal views can and will shape how voter preferences shape state power in Europe. The second aspect is describing how the U.S. has better capabilities to integrate its immigrants than Europe, whether that is due to institutional, linguistic, economic, or cultural reasons. When these factors of immigrant culture, weak integration of immigrants, political backlash, economic & labor market rigidity, and lax immigration enforcement collide, it is unsurprising that there is considerable tension in Europe. 

This tension in Europe represents a scenario in which conditions are considerably more constrained. In response to that tension, European lawmakers voted for a proposal late last month to deport rejected asylum seekers to return hubs outside of the European Union. Although not official law, this vote in March overcame a major legal hurdle. While awaiting official enactment, five countries (Germany, the Netherlands, Austria, Denmark, and Greece) are already negotiating pilot arrangements outside of the EU framework. 

This is understandable given the context. Before continuing, I want to say that return hubs are not the same as Trump wanting mass deportation, the latter of which I thought was a terrible idea. For the U.S. context, mass deportation has a high marginal cost because of how much it would need to expand to enforce, low marginal efficiency due to its scale, and the high disruption per unit enforcement. 

With Europe, the return hubs are not about mass deportation. The policy is targeted at asylum seekers that were rejected and decided not to leave. About 20 percent of rejected asylum seekers actually leave Europe. Given that there have been 7.4 million first-time asylum seekers from 2016 to 2025, 80 percent of people staying would mean about 5.9 million people staying. These return hubs be seen as a second-best by attempting to restore enforceability to an asylum system that has been de facto turned into open immigration to Europe.

I do have some concerns about whether this can work. The closest proxy we have to such a policy is Australia's offshoring process in which Australia intercepted asylum seekers at sea and forcibly transfer them to Nauru and Papua New Guinea. It might not have turned out so well. Aside from being costly and violating human rights, it did not necessarily deter asylum seekers, especially after looking at the numbers of arrivals. The Australian case is more border control, whereas in this European case, they have already arrived and might have settled down in Europe. 

I understand the political impetus for this asylum policy, which is why this will likely be part of Europe's approach to immigration more broadly. There has been a greater clash of civilizations between Europeans and immigrant communities. There has been an emergence of the Far Right in Europe, in no small part of Europe's general incapability to control migration. 

And when I say Far Right, I do not mean it like a stereotypical woke person does to insult anyone who disagrees with them. I am referring to a political right that is more nativist, nationalistic, and Euro-skeptic, especially relative to the center or moderate conservatives in Europe. Integration of immigrants is not taking place throughout much of Europe, and the political backlash and the emergence of anti-immigrant sentiment is showing, including through this push for return hubs. 

I personally believe that there are significant cultural and religious frictions that make integration of Muslim immigrants more difficult, if not downright impossible, and that is on top of the institutional constraints of European governments and markets. Whatever what one believes about long-term cultural compatibility, the overall policy direction in Europe indicates that many European countries are not willing to bet their future that these integration challenges are temporary or fixable. 

Irrespective of my take on the political dynamics throughout Europe, I think return hubs could function as a second-best option to the current restraints in the European asylum system. Return hubs operate at the post-adjudication stage. Completing removals makes the designation of "rejected asylum seeker" a meaningful legal endpoint. By externalizing processing arrangements, Europe can restore faith to a system where return enforcement is presently weak. Broadly, this does not reflect an ideal policy choice. It an adaptive institutional response given high migrant inflows, present low enforceability, and rising political backlash.

To reiterate, the European case study is not the same as the U.S. I previously made the case for letting in Afghan refugees in response to Biden pulling out of Afghanistan, and similarly did so for Syrian refugees coming to the U.S. My default belief is that migration can create significant economic and humanitarian gains when properly governed and managed. In Europe, however, there is institutional failure that has made lower-intensity enforcement of immigration law non-credible. Removal of rejected asylum seekers is the exception, not the norm, thereby making the European example one of system-level limitations. 

As much as I support the principle of allowing people to migrate and pursue a better life, the European experience is making it clear that a comprehensive immigration system is only as strong as its enforcement mechanisms. Without basic governance over boundaries, immigration becomes self-sabotage in the guise of compassion.

Immigrants Aren’t Draining Welfare: The Welfare State Is Draining America

Immigration is one of those peculiar topics in US policy debates that produce durable myths. They sound like plausible claims in theory, but collapse under the slightest bit of empirical evidence. Over the years, immigrants have been accused of spikes in crime, overwhelming public services, and draining this country's finances. These claims are so hard-wired into the political discourse that they harden into "conventional wisdom." Last year, I examined the "migrant crime wave" claim and refuted it by showing how immigrants are much less likely to commit crimes. 

Schrödinger's Immigrant and the Myth about Immigrants and Welfare

The welfare argument is no exception. In policy debates, you see what is jokingly referred to as Schrödinger's immigrant: an immigrant who is too lazy to work but manages to take all the jobs, which is a paradox that plays into an inaccurate, nativist caricature of immigrants. The nativist crowd at the Center for Immigrant Studies argues that immigrants consuming welfare and working can go together, thereby trying to refute the idea of Schrödinger's immigrant. While rhetorically clever, it only focuses on the theoretical possibility of the two co-existing rather than actual welfare consumption patterns. 

This is where research from the Cato Institute that was released last week comes into play. They actually did the work to see how much welfare and means-tested benefits are consumed by immigrants versus native-born US citizens. It turns out that immigrants consume about 24 percent less in welfare benefits than native-born citizens on a per capita basis. This finding lines up with a National Bureau of Economic Research paper from 2020 that looked at welfare use from 1995 to 2018. Guess what? Those researchers found that immigrants consume much less welfare than their native-born counterparts. 

Why Immigrants Consume Less Welfare

Immigrants consuming less welfare makes sense when you think it through. Immigrants are younger, healthier, and are more likely to either be working or actively seeking work. Because they come with a higher labor force participation rate and fewer chronic health conditions, they are less likely to need disability benefits or unemployment insurance. Furthermore, immigrants face legal and administrative barriers to receiving benefits. 

Immigrants as Net Contributors to Society

When you hear this anti-immigrant diatribe of immigrants draining the welfare system, it ignores the other half of the conversation, which is what immigrants contribute to the economy and to society. In 2024, I illustrated how immigrants contribute billions in income, property, and sales taxes every year. When you look at both the costs and the benefits, the picture flips. Immigrants do not merely "pay their own way." It turns out that immigrants are actually a net positive for government budgets. 

The Real Problem: The Welfare State

The evidence is clear. Immigrants are not the ones bankrupting this country. Immigrants use less welfare than native-born citizens and also contribute significantly in taxes. In net, immigrants are a benefit to the economy, not a burden. I have been consistent in critiquing the welfare state, whether it has been Social Security, Medicare, Medicaid, food stamps, or TANF. The anti-immigrant crowd rails against immigrants supposedly "draining the system" (which they don't), yet pays far less attention to the programs that drain this country's finances. If anti-immigrant nativists want to get at the real problem, they would go after the real problem of a large welfare state that costs the American people hundreds of billions of dollars every year. Otherwise, that is not fiscal responsibility or concerns about taxpayer dollars. That's just scapegoating dressed up as moral outrage.

Open Borders Require Integration: Illiberal Immigrants and European Policies Create a Perfect Storm in Europe

Immigration has the potential to unleash freedom and economic progress. That is more than textbook theory. At least in a U.S. context, I am all in favor of more immigration. Immigrants to the United States make a net positive contribution to the U.S. economy, including low-skilled immigrants. Immigrants to the United States also help improve fiscal health. In spite of the politics surrounding immigration in the United States, the case for immigration for the United States is a no-brainer. When I look across the Atlantic, it makes me stop and wonder. 

Immigration Tensions in Europe

In a European context, there is a deep fault line between many natives and immigrant communities, whether those rifts are caused by fears of cultural displacement, economic competition, or the burden on the welfare state. A number of natives worry that the immigrants will erode a sense of shared identity while straining public services. This tension is amplified by the fact that immigrants might not fully adopt local norms and might vote for more illiberal policies and influence culture to be more illiberal. These anxieties are not merely theoretical. 

Religious Law Versus Secular Institutions

The French polling and market research firm Institut français d'opinion publique (IFOP) released quite the eye-opening poll about three weeks ago. This IFOP poll looked at the connection that French Muslims have to Islam and Islamism. One disturbing finding was that 46 percent of French Muslims believe that sharia law should rule France. It is down from the 54 percent in 2008, but it is still high. 

Another jarring finding is that 57 percent of French Muslims from the age of 18 to 24 years old said the rules of Islam are more important than France's secular laws. (see below). This is in contrast to the 44 percent of all French Muslims, thereby suggesting that France's Muslim youth is more extreme in its beliefs. Even a minority today can shaper future trends, particularly among younger generations, which has the real potential to shift community expectations or voting patterns over time. Even worse, 38 percent of French Muslims sympathize with at least some positions of Islamism. To think this is happening in a country that has valued secularism (laïcité) to the point where separation of civil and religious society is in  Article I of the French Constitution. 

Muslim Immigrants with Extremist Views Is a Problem Throughout Europe

France is not the only country that is having problems with integrating its Muslim immigrants. An inability of Sweden to integrate its Muslim immigrants was the takeaway of my 2023 trip to Sweden. Take a look at this JL Partners poll of British Muslims last year (see below). 32 percent of British Muslims want sharia law, which is the same percent of British Muslims who believe that Islam should be the national religion of Britain. 65 percent believe the Muslim holiday of Eid-al-Fitr should be a public holiday in Britain. 27 percent of British Muslims are okay with outlawing homosexuality, which is not quite double of the overall British public. 57 percent of British Muslims want the compulsory use of halal food in all schools and hospitals. Then there is the 52 percent of British Muslims that want to make it illegal to show a picture of Mohamed. These findings indicate some authoritarian views in which Muslim immigrants want to impose their way of life onto Britain. 

A high prevalence of Islamism was also a finding in a study from Criminological Research of Lower Saxony: 67.8 percent of Muslim schoolchildren believe that the Koran should take precedent over German secular law (Dreißigacker et al., 2023). This trend of believing that religious rules are more important than secular ones dates back at least to 2008 when the Berlin Research Agency for Social Research (WZB) conducted a survey of over 9,000 Muslims throughout Europe (Koopmans, 2008). The WZB also showed that European Muslims are more fundamentalist than European Christian counterparts, whether it is believing that there is only one true interpretation; Islam should not be modernized; you should not have gay friends; or the Jews should not be trusted. 

In 2024, the European Union's Agency for Fundamental Rights (FRA) conducted a survey of 10,000 Muslims in Europe and details the discrimination that Muslims face in Europe. This discrimination is worth mentioning because if a sizable portion of European Muslims perceives profiling and discrimination that can and does lead to lower trust in secular legal institutions. All things considered equal, that could make sharia law more attractive to Muslims that can feel that the system is not working for them.  

Integration Challenges Across Europe

As I brought up earlier this year in my criticism of using "Islamophobia" as a cudgel to silent dissent, this illiberalism that a significant number of these immigrants import from their home country and attempt to implement in Western society is quite problematic. For a free democracy to work, the institutions that protect individual liberty (e.g., women's rights, gay rights, minority rights, freedom of religion) must remain intact. Looking at Muslim-majority countries, there is a general lack of freedom of speech, LGBT rights, and gender equality norms, all of which has me concerned about Europe. 

The societies of Muslim-majority nations by and large have sharia-based legal expectations in an honor-based culture. Bringing in immigrants en masse that do not respect liberal and democratic norms, institutions, or mores causes societal erosion and create institutional friction when religious practices clash with liberal, democratic values. Even if a small subset support at least some Islamist positions, their presence can influence schools, neighborhoods, and political discourse, thereby creating pressures that affect broader society. 

From a libertarian standpoint, the concern is not cultural differences themselves, but rather how voter preferences translate into state power. In majoritarian systems, large groups favoring restrictions on speech, gender equality, religious freedom, or market exchange can shift electoral outcomes that democratically erode liberal institutions faster than they can be rebuilt. When those illiberal preferences translate into illiberal laws, the outcome is predictable: expanded state authority and fewer individual rights.

Why a More Liberal and Open Immigration Policy Works Better in the United States Than Europe

It is not only immigrants with illiberal views that are to blame here. I can throw shade at European governments and how they govern. The cultural, linguistic, fiscal, and economic reality of Europe in contrast to the United States can explain why open immigration does not work nearly as well in Europe as it does in the United States. American institutions are built around economic absorption and adaptability, whether that is a more flexible labor market, greater geographic mobility, or a skills-oriented immigration system that accelerates integration. The United States also has historically maintained a long-standing assimilationist culture that encourages new citizens to adopt a shared civic identity. 

Europe cannot make such a claim. Europe is plagued by rigid labor markets and large universal welfare states. After all, Nobel Prize winner Milton Friedman argued that you cannot have both a large welfare state and open immigration. Furthermore, the linguistic and cultural fragmentation in Europe, not to mention the economic rigidity, slow integration and increase fiscal and social pressures in Europe. Aside from linguistic fragmentation, the complex licensing and labor laws along with a relatively regulated housing market make it more difficult for immigrants to move around to better job opportunities, which creates demographic mismatch. 

Postscript

Muslim immigrants who do not accept Western values combined with the lack of economic freedom and linguistic & cultural fragmentation on Europe's part create a cultural powder keg waiting to go off. Some potential policy solutions towards integration can include language programs, vocational training, and civic education, much like I suggested when providing alternative options to a burqa ban last month. Even though effective integration policies are theoretically available, Europe's institutional, cultural, and political realities have shown that widespread implementation is challenging.

In a free society, open borders are ideal. Human movement, voluntary exchange, and cultural pluralism are foundations of a free society. However, these ideals depend on institutional compatibility. A libertarian analysis cannot ignore that Europe's rigid markets, expansive welfare systems, and centralized governance structures prevent the kind of spontaneous-order integration that open borders require. Given Europe's current institutional design, the choice is not between "freedom" and "restriction," but rather between preserving and losing basic liberal order itself.

I would personally prefer a scenario in which Muslim immigrants can integrate into their respective newly founded country, but outside of some rare exceptions (e.g., Norway), that process has been quite elusive and hardly inspires confidence in me that matters will improve. 

Given the political reality and Europe's assimilation failures, there is a part of me tempted to say that restricting immigration or revoking visas for those who have ties to terrorist organizations or extremist groups, at least for now, seems to be one of the least-worst options available for safeguarding liberal institutions. I know such policies come with considerable tradeoffs, including the real potential for government expansion. But seeing how Europe is declining, it’s still tempting. Alternatively, scaling back the welfare state or a guest-worker or temporary-visa regime for sectors with high demand could also help with the matter, but that would be one option that would need other alternatives.

One thing for certain is that the status quo in Europe is untenable. Without such measures to improve integration or economic freedom, the resulting political, social, and legal friction continue to erode individual rights and push Europe towards an even more illiberal and authoritarian trajectory. 

Trump’s $100K H-1B Visa Fee Is a Protectionist Penalty on Innovation and Growth

About a month ago, President Trump imposed a staggering $100,000 fee on each H-1B visa, which is a non-immigrant visa that allows U.S. employers to temporarily hire foreign workers in specialty occupations (e.g., STEM). Per his executive order, Trump believes that the H-1B program is displacing skilled Americans while posing a national security risk. Trump's concern is that foreign workers replace American workers in tech fields and that the program is exploited for labor cost reduction, although the Federal Reserve Bank of Richmond found that to be untrue (Morales, 2025). It is true that the fee does not apply to current holders or renewals, but it will have damaging effects all the same. 

I wanted to hold off on writing on this topic until there were at least some studies showing estimates, however preliminary they might be. Now I have something to write about. A study from Oxford Economics looked at the effects of Trump's immigration policies. The study shows that there will be 750,000 legal immigrants, which is 140,000 fewer immigrants than prior to Trump's policy. The study does not isolate the visa fee's effects because it is intertwined with other policies. At the same time, the fee considerably contributes to this slowdown of skilled labor inflows. This lines up with the prediction of JPMorgan Chase's economists that Trump's fee will lower H-1B visa authorizations by as many as 5,500 per month. Another major consequence of this fee is that, according to market research firm Forrester, buyers ought to expect a 2-3 percent increase in onsite billing rates for new contracts because of the higher labor costs.

There are no other visa fees to compare this to because there has never been anything in U.S. economic history this exorbitant. That is why I have to go to the next-best proxy: the H-1B cap. The cap is different in that it is a hard limit. Once the cap is reached, there are no new visas. At least with the visa fee, a company could theoretically hire if they are willing to pay the price. However, this high rate will deter H-1B hiring and price many companies out of hiring H-1B recipients, as the JPMorgan Chase estimate indicates. The visa cap and the visa fee are two sides of the same coin because they are government-imposed barriers to the influx of skilled labor. 

I pointed out as early as 2017 what happens when the H-1B supply is restricted: slower innovation, reduced competitiveness, and more offshoring or automation instead of hiring H-1B workers. An economist from the Peterson Institute for International Economics, Michael Clemens, demonstrates in his September 2025 report how beneficial H-1B visas have been. From 1990 to 2010, H-1B visa holders were responsible for 30 to 50 percent of all productivity growth in the United States (Peri et al., 2015). That includes Vinod Dham, the H-1B visa holder who led the team that launched the first Pentium processor. 

It will be the startups and smaller businesses that get harmed the most by this policy. Only the largest firms will be able to afford the fee. For context, the H-1B visa fee prior to Trump's executive order was $1,500, which represents a hike of over 6,500 percent. Legal sponsorship already costs $10,000. Throwing on an additional $100,000 is not going to make companies want to hire domestic employees. 

The visa fee is similar to minimum wage in some ways, although the minimum wage is a more direct cost than the visa fee. Both act as price floors on labor that reduce demand for the affected labor. In both instances, they are advocated for to protect workers, but the result is the opposite. As the Manhattan Institute points out, the visa fee will push employers to offshore technology and research or to automate. Both outcomes will lower U.S. employment, which is contrary to Trump's intent. This is similar to how the minimum wage incentivizes firms to either cut workers' hours, cut workers' benefits, let workers go, or automate. 

The opposite effect is also observable. According to the Partnership for a New American Economy, each H-1B visa recipient results in 1.8 new jobs. This is because H-1B workers often complement U.S. workers to be more productive in such areas as management, design, marketing, and sales. Creating a shortage, much like Trump is doing, will delay projects and reduce the competitiveness of U.S. companies, which undermines the U.S. economy that Trump thinks he is helping. 

The reality is that the H-1B visa program has vast benefits to the U.S. economy. A dynamic economy helps all workers prosper. It is also why Trump's mass deportation causes such negative economic impacts as lower GDP, employment, and wages. Trump would be more effective if he were to focus on education, apprenticeships, or workforce development. Instead, Trump chose a de facto tax on talent that effectively guts the H-1B program. This means the high-skilled workers will go elsewhere, such as Europe, Canada, or Australia. As a result, Trump is starving the United States of global talent instead of making America great again.

December 8, 2025 Addendum: I recently came across a paper from the Federal Reserve Bank of Richmond on the topic of the H-1B visa fee. First, the Bank finds that the fee would sharply reduce the inflow of college-educated workers, particularly in IT services, universities, and nonprofit research. This could push companies to offshore instead of hiring U.S. workers. Second, the authors point out that hiring H-1B workers adds native-born staff, with no net displacement. This is all to say that the fee undermines innovation, firm growth, and economic welfare for Americans. 

Red Ink and Green Cards: How Increasing Immigration Improves the Fiscal Health of the United States

After the dust settled in the 2024 U.S. presidential campaign, it was a given that immigration was going to be a major topic during Trump's second term. He beefed up border control and has implemented mass deportation. Additionally, Trump signed off on a 1 percent remittance tax that will most likely fuel the immigration he is trying to stop. He is trying to use a law and order justification, even though immigrants are about half as likely to commit crimes as native-born citizens. While he is tackling immigration for criminal justice and cultural reasons, there is one aspect of restricting immigration that Trump is neglecting: its fiscal impact. 

What happens to a nation's balance sheet when a country closes its doors to newly arrived immigrants who are workers, taxpayers, and/or future parents? Amid the campaign slogans and punditry, few commentators or pundits have asked what immigration will cost this country in a fiscal sense. As federal deficits mount and such entitlement programs as Social Security and Medicaid become insolvent, immigration is not merely a cultural issue, but a budgetary one. A new report from the American Enterprise Institute (AEI) released earlier this month takes this concern seriously by presenting a post-pandemic snapshot with updated 2024 Current Population Survey data. With these data on newly arrived immigrants, there is a more updated projection of fiscal impact.

The AEI report finds that immigrants with a Bachelor's or graduate degree have a strong net fiscal impact. For low-income households, the net fiscal impact has a net direct cost in the short-term (see below). However, the AEI study identifies often overlooked, indirect positive fiscal effects as a result of low-income workers who increase the net benefit. This is hardly surprising since undocumented immigrants pay nearly $100 billion in taxes annually. 

One of the key indirect benefits is that the immigrants provide higher wages of native workers as a result of complementary immigrant workers. By increasing labor market efficiency, both low-skilled and high-skilled immigrants can boost native workers' wages, which in turn increases overall tax revenue.

Second, immigrants contribute to capital stock growth. With more workers, the existing stock of capital (e.g., factories, equipment, infrastructure) becomes relatively scarce. To rebalance the capital-to-labor ratio, firms are incentivized to invest in new capital. More capital translates into more capital-related tax revenue. Once these indirect positives are accounted for, it can offset the short-term fiscal costs on the state level in education (see Colas and Sachs, 2024). 

Looking at the long-term, AEI estimates that in a 75-year time horizon, increased immigration would reduce the fiscal gap by $750,000 per household. With the 2.2 million new households (7.9 million people/average household size of 3.6 people), the result would be a reduction of the long-term fiscal gap by $1.75 trillion. 

This finding about net positive fiscal impact lines up with a 2023 Cato Institute white paper saying that even immigrants without a high school diploma contribute a net positive fiscal impact. This AEI paper also lines up with a Congressional Budget Office (CBO) report from July 2024 about the fiscal impact of immigration. The CBO found that over the next decade, increased immigration by 200,000 a year would add $1.2 trillion in revenue. The 2023 IMF research paper also demonstrates the macroeconomic benefits of immigration, including increased GDP, employment, total factor productivity (TFP), and labor productivity.

This evidence should be taken seriously when analyzing Trump's mass deportation. This AEI report shows that the post-pandemic surge in immigration strengthened federal revenue and expanded the labor supply. As I pointed out last month, forced mass deportations would not only be morally problematic, but fiscally reckless. In terms of increasing fiscal deficits, mass deportation will end up reducing the GDP and reducing workers' wages, both of which have serious fiscal consequences.

Immigrants are often depicted as a fiscal burden on the citizens of the United States. However, after crunching the numbers, the opposite turns out to be the reality. Far from draining this country, immigrants stabilize this country's fiscal health. With growing deficits and declining fertility levels in the United States, restricting immigration not only fails to solve the problem; it makes matters worse. If Trump wants to be serious about immigration policy, it should not start with a border wall, raids from ICE, or fantasies about how immigrants are disproportionately responsible for crime. It needs to start with economic reality. 

Trump's 1% Mistake: How a Remittance Tax Will Fuel the Immigration It Aims to Stop

Last month, President Trump signed the One Big Beautiful Bill Act (OBBBA), a budget reconciliation bill that had quite a bit in it considering it is over 1,100 pages long. As I mentioned shortly after the enactment, I would probably need to cover other provisions in the future and here we are. The Left-leaning outlet Vox brought one such provision to my attention: a one percent remittances tax. A remittances tax is an excise tax imposed on the non-commercial transfer of money that individuals send from one country to another. Remittances are most common for immigrants who send money to their families in their home country. 

Despite of what some might think, remitted dollars are not "lost" because the U.S.' global dominance means that the dollars return in the form of trade, investment, and dollar demand. Rather than disappear, remittances act more like temporary outflows. So why did the Republicans decide to tax remittances? In the Committee report's own words:  

The Committee believes that the ability of non-citizens and non-nationals of the United States to send payments to individuals in other countries through the system of remittance transfers may encourage illegal immigration and lead to the over reliance of some jurisdictions on the receipt of such remittance flows.

In short, the justification is curtailing illegal immigration. Some might argue that because it was initially proposed at 5 percent and eventually lowered to 1 percent, that somehow makes it better. Guess what? It really does not, and not simply because the 1 percent applies to all remittance senders, including U.S. citizens (although bank accounts and U.S.-issued credit cards and debit cards are exempt). This tax will have many ramifications both in the United States and the global economy. 

Taxes have two main functions: to generate revenue and to discourage behavior. First, let us take a look at the revenue. In the case of the remittances tax, the Joint Committee on Taxation (JCT) estimated that it would generate $10 billion in revenue over the next decade. The Center for Global Development (CGD) puts the estimate at an even lower $4 billion in revenue over that time period. Remittances taxes imposed in other countries offer little hope. An International Monetary Fund (IMF) study found that the other two nations that notably have a remittances a tax, Gabon and Palau, did so while generating a negligible enough amount of revenue where both countries scrapped the tax.

I am not too optimistic about the revenue estimates considering that the compliance costs will diminish actual revenue, including requirements for financial institutions to distinguish between taxable and exempt payment methods, maintain detailed transaction records, and manage refundable tax credits for eligible senders. The compliance will also violate data privacy since the financial institutions will have to collect and share such sensitive personal data such as citizenship status and payment method details. While it will hit low-income and immigrant communities most heavily, U.S. citizens may face privacy risks due to increased financial surveillance, documentation requirements for refunds, and potential misclassification or data exposure. 

What behavior does a remittance tax discourage? Sending money to other countries. This might sound like a win for the anti-immigration Republicans, but it will not be. Remittances outpace foreign direct investment and overseas development aid at a rate of 3 to 4 times. Destinations include such nations as Mexico, El Salvador, Guatemala, and India, which are among the top countries of origin for the undocumented workers that Trump does not want illegally entering the country. 

A study from the Center for European, Governance, and Economic Research found that a one percent increase in the cost of sending remittances translates into a 1.6 percent decrease in remittances sent (Martínez-Zarzoso et al., 2020). This is a big deal because remittances account for at least 3 percent of GDP for 78 countries (World Bank). The Center for Global Development used the aforementioned study along with bilateral remittances data from the World Bank to find that Mexico that stands to lose, at $1.55 billion annually. 

In terms of percentage of GNI, El Salvador, Honduras, Jamaica, and Guatemala will feel it the most (see below).

A one percent tax does not sound like a lot, but it translates into money that never reaches people in developing countries. For example, remittances in Mexico have helped pay for medical bills and support pensions and public services. With underdeveloped banking systems, cash is often how many in developing countries receive money. As the Overseas Development Institute brings up, remittances are effective because have a greater impact on poverty reduction because they directly reach a greater share of the population and more poor households, not to mention that the greater purchasing power results in greater economic utility. By curtailing funds that help people in developing countries that reduce poverty, cope with financial shocks, and weather natural disasters, life will become that much more unstable for people in these countries. The increased instability created as a result will incentivize citizens in developing countries to want to emigrate to the United States, which undermines Trump's stated goal of curtailing illegal immigration.

Then there is the matter of crime. Taxing remittances incentivizes sender to bypass regulated services providers and push their transactions into informal or underground channels, which like all underground markets, are less transparent and harder to monitor.  This shift makes it more difficult to trace illicit flows, thereby undermining national security and foreign policy interests. Because this will push immigrants to underground options, they will be exposed to greater fraud, theft, and organized crime exploitation.  

On top of all of this, this remittances tax has the hallmarks of inferior tax policy. It is a form of double taxation because migrants already pay an income tax to the host country. It is a regressive tax because remittances are most commonly sent to the poor families of migrants, thereby increasing the burden of poverty. This remittances tax is also non-neutral because it discourages an arrangement where a household is split between the United States and another country. This tax is targeted, inconsistent with an overall tax design for a country without a value-added tax (VAT). The targeted nature of this tax is hypocritical considering that the GOP is purportedly the party of family values and these remittances senders are trying to help their families in poverty-stricken parts of the world.

Ultimately, the remittances tax is not about controlling immigration. This misguided and counterproductive tax will weaken economies abroad, disrupt families, and burden law-abiding individuals with needless bureaucracy and privacy violations. It is a tax that raises little revenue, targets vulnerable communities, and increases government surveillance. This policy ends up depreciating the American values of opportunity and responsibility that made this country great. This tax will contribute to the global inequalities that fuel migration in the first place. Instead of deterring it, this tax will fuel the immigration at a considerable human and economic cost.

Trump's Mass Deportation Will Hurt At Least 63% of U.S. Workers and Cause Economic Fallout

During Trump's 2024 presidential campaign, he relentlessly emphasized border security, enforcement, and crimes committed by illegal immigrants. It does not matter that Biden was actually quite strict on immigration or that illegal immigrants are much less likely to commit crimes. Immigration ended up being one of the main issues that catapulted Trump into a second term. It even resonated enough with the Latino community that 48 percent of Latinos voted for Trump in 2024.  Not only are more Americans in support of reduced immigration to this country, but Trump's idea of mass deportation has become more popular. Last decade, 37 percent of Americans supported mass deportation. As of last year, that climbed to 47 percent, with 84 percent of Republicans being on board (Gallup). 

While mass deportation is becoming increasingly popular, there are real-world implications that are not neatly captured in campaign slogans. Before embracing or rejecting mass deportation, we should look to what the data have to say about economic and fiscal implications. The Wharton School of Business, which is the premier business school, did exactly that in a policy brief it released late last month.

This report presents two possible scenarios. The first is a four-year policy in which unauthorized immigration returns to baseline levels in 2029, after Trump's current presidential term. The second scenario assumes that all unauthorized immigrants will be removed from the United States by 2034. This paper gets into a few of the fiscal and economic implications that go beyond the generic "GDP will decline." Unsurprisingly, the second scenario has larger outcomes because it costs more to implement a policy that removes all unauthorized workers. 

One of the more interesting implications is that of wages of those in the U.S. labor market. The report distinguishes between high-skilled labor (which accounts for 63% of the working force) and low-skilled labor. In both scenarios, high-skilled labor experiences a decline in wages. That decrease would be an average decrease of $494 per year in the first scenario and $2,764 in the second scenario. 

It ends up a bit different for low-skilled workers. In the first scenario, low-skilled wages increase by 1.1 percent in 2034 and fall by 0.6 percent in 2054. It is in the second scenario where low-skilled labor experiences true increases. This means that low-skilled workers can experience a decrease in lifetime earnings of $8,600 (four-year policy) or a gain of $63,600 (10-year policy), depending on which policy takes in effect.

Then there are the other effects of the deportation. The four-year scenario is expected to increase the budget deficit by $350 billion and reduce the GDP by 1.0 percent by 2034. In contrast, the ten-year scenario is expected to increase the budget deficit by $987 billion and reduce the GDP by 3.3 percent by 2034.

While the 10-year plan makes for flashier headlines, it is also the less likely of the two. Being able to remove all unauthorized workers is unfeasible, and I do not simply say that because it has not been done in the past. Think about all the enforcement, detention, legal proceedings, and transportation that it would take to remove 11 million people from the United States. The legal, economic, and social blowback would be tremendous. While more difficult, the four-year plan is more feasible than the ten-year plan. 

Regardless of which scenario plays out, this study concludes that mass deportation policies harm the greater U.S. economy, reduce overall average wages, and increase federal deficits. The only way that low-skilled workers benefit from mass deportation is if the U.S. government manages to remove all unauthorized workers, which is unlikely. These findings largely consistent with what I wrote in October 2024 when I scrutinized Trump's mass immigration idea on economic, social, legal, and political terms. 

What this Wharton School study adds to the deportation debate is a clearer sense of the tradeoffs of deportation, not simply in dollars and cents, but also in the economic futures of most American workers. For those who care about the national interest of the United States, what should matter is a policy grounded in economic reality, not empty slogans. All Trump's mass deportation does is throw American workers under the bus.

Migrant Crime Wave Is a Myth: New Study Shows Immigrants Are Much Less Likely to Commit Crimes

During Trump's presidential campaign, he pushed the idea that there is a "migrant crime wave." Essentially, his argument that was due to the influx of immigrants, there is a corresponding and substantial increase in crime that is caused by these immigrants, particularly undocumented migrants. It is a justification that Trump has used for his mass deportation plan. Earlier this week, the White House lawn was lined with mugshots of arrested immigrants accused of crimes, thereby reinforcing the notion of a "migrant crime wave." Even about half of U.S. citizens believe that immigrants are causing an increase in crime (Gallup). The problem is that as much as Trump likes to scapegoat immigrants, the "migrant crime wave" is a myth.

Last week, the Cato Institute released an analysis entitled Illegal Incarceration Rates, 2010-2023. With all the stories on the news about "illegal immigrants committing crimes," you would think that they are a menace to society and are committing crimes like mad. But guess what this analysis found? "Illegal immigrants are half as likely to be incarcerated as native-born Americans. Legal immigrants are 74 percent less likely to be incarcerated than natives. If native-born Americans were incarcerated at the same rate as illegal immigrants, about 806,000 fewer natives would be incarcerated."     

If the "migrant crime wave" theory played out, there would have been a surge in crime in 2023 at the border states that corresponded with the record 2.3 million immigrants that were encountered at the southern border. Yet Texas' violent crime rate decreased 15 percent in 2023, and Arizona's violent crime rate dropped by 8.8 percent. More interestingly, Texas is the only state that tracks crime data by immigration status. Guess what Texas' data has to say? The homicide conviction rates for legal and illegal immigrants are 36 percent and 62 percent lower, respectively, than for native-born Americans living in Texas. 

Sadly, this moral panic about immigrants committing a disproportionate amount of crime is nothing new. Even a 1931 report from the Hoover Administration pointed out that blaming immigrants for crime is about as old as the U.S. colonies themselves. Yet the results remain the same. A working paper at the National Bureau of Economic Research looked at immigrant crime rates from 1860 to 2019 (Abramitzky et al., 2023). Over the past 150 years, immigrants have consistently had lower crime rates than native-born citizens. The authors estimated that immigrants are 60 percent less likely to commit crimes than native-born citizens. 

When you think through the reasoning, it makes sense that immigrants are less likely to commit crimes than native-born citizens. The fact that immigrants make the conscious decision to leave their home country behind for a better future shows resilience, ambition, and a focus on the future. There is a high deterrence factor, especially for illegal immigrants/undocumented workers, because the punishment is higher. Since immigrants have higher employment rates than native workers, better economic opportunity and a steady job mean less likelihood of committing crime. Also, immigrants are more likely to have stronger bonds with family and civil society, thereby reducing likelihood of crime.  

What does this all mean for the "immigration and crime" conversation? The data do not substantiate the idea that more immigrants equal more crime. Quite the opposite! The U.S. government previously tried implementing a program to deport illegal immigrant criminals called Secure Communities. It did not do anything to lower crime rates. Peddling this myth harms the Latino community in particular while fracturing the relation between police officers and the overall community. If anything, this fracture can foment mistrust that makes people less likely to report crimes or cooperate with the police. This can hamper the police's ability to conduct investigations, thereby increasing the crime rate. None of this surprises me since immigration creates black markets, and black markets make matters worse. 

As this report from the American Immigration Council illustrates, greater immigration keeps crime down because the social ties and robust community programs that are common with immigrants help maintain lower crime rates. Immigrants are a net positive for the economy (even "low-skilled" immigrants) and significantly contribute to tax revenue. The social and economic positives of immigration help keep crime rates down. If the anti-immigrant side is legitimately concerned with crime rates, what we should do is allow for more legal immigration while channeling more resources from immigration enforcement to ordinary police. Otherwise, the anti-immigrant, nativist crowd is all talk and no action that will actually help with reducing crime rates. 

Trump Revives His Trade War, This Time Under the Guise of Fighting the War on Drugs

The Tariff Man is at it again. Last Saturday, Trump imposed 25 percent tariffs on Canada and Mexico, as well as an additional 10 percent tariff on Chinese imports. The justification Trump used was to address the threat posed by fentanyl, and to use the Emergency Economic Powers Act to do it. So why China, Mexico, and Canada? Because according to Trump, the fentanyl comes from China and passes through Canada and Mexico before it comes to the United States. Granted, he was able to delay the tariffs on Mexico and Canada for a month because he received some concessions about border security as it pertains to fentanyl. Whether they resume in a month remains to be seen. At the same time, here are some reasons why this latest round of tariffs is ridiculous:

• China, Mexico, and Canada will not be paying these taxes. It is not the foreign countries that bear the majority of the tax burden for tariffs, but it will be the American consumers and American businesses. There were a dozen studies showing that tariffs during the first Trump term were almost entirely paid by U.S. consumers and businesses. The fact that U.S. citizens and enterprises will get hit much harder than China, Mexico, or Canada ever will undermines the argument. 
• Trump is undermining his trade agreement from his first term. Trump touted the United States-Canada-Mexico Agreement (USMCA) as the fairest and most balanced trade agreement the United States ever signed into law. This bout of tariffs violate his promise with USMCA, which can make him less trustworthy in future engagements with other countries. 
• This trade war will increase further trade retaliation. Other countries can and do retaliate in response to tariffs. The Federal Reserve concluded that retaliation helps offset what little benefit that tariffs develop. The Peterson Institute for International Economics found that the GDP of all countries involved will lower as a result of the tariffs and subsequent retaliation. 

• Previous tariffs hurt the American people. When Trump implemented the tariffs in his first term, what happened? Trump's tariffs cost the country $51 billion in economic output, a reduction of wages by 0.14 percent, and employment decreased by 166,000 jobs. Bush Jr.'s tariffs cost 200,000 jobs and $4 billion in lost wages. What about the tariffs of Trump's tariff mentor, William McKinley? They resulted in lower productivity and higher consumer prices.
• Trump's tariffs are likely to hurt the American people again. Last week, Trump justified the tariffs by saying that they will make America rich and very strong. Too bad he is wrong on that front. Not only did tariffs not work in the past. The Tax Foundation estimated that these tariffs would shrink economic output by 0.4 percent over the next decade while amounting to a tax of $800 on the average household. The Peterson Institute for International Economics calculated that it will reduce the average household's purchasing power by $1,200 per year. Trump still has not learned that you cannot tax your way to prosperity. 

• Trump's argument about tariffs and economic prosperity does not hold. If tariffs are so great, why does Trump simply implement them no matter other nations decide to do? Why did he take them off the table instead of go ahead with the tariffs if they are so great? If tariffs are simply tools to threaten other nations with and then Trump removes them upon compliance, then tariffs were never about economic prosperity. 
• Nor does his argument about stopping border crossings. Trump also said that he wanted to implement these tariffs because he wants to "stop the flood of illegal aliens." This is humorous because a tariff is a subpar way of going about it. Why? As the American Enterprise Institute (AEI) brings up, tariffs appreciate the value of the dollar. A dollar with a higher value makes working in the United States more attractive to immigrants, thereby increasing border crossings. 
• And fentanyl will get cheaper. More immigration will not be the only result of the appreciated dollar as a result of the dollar. To quote AEI again, the exchange rate appreciation would lower the dollar price of fentanyl because the fentanyl would not be subject to tariffs. Cheaper fentanyl would mean greater consumption, more substance abuse, and more overdoses, which is exactly what Trump purports to be preventing. 

Conclusion. These tariffs are not about generating prosperity for all, but about inducing fear and compelling behavior. Not only do tariffs harm the economy, but these particular tariffs will undermine Trump's goals of stopping fentanyl consumption and border crossings. Furthermore, Trump's actions effectively gives him the ability to start economic war without notice or oversight. To quote Charles Cooke from National Review, "They [the tariffs] are constitutionally suspect, statutorily usurpative, diplomatically toxic, and culturally chaotic." Instead of making America great again, Trump's tariffs will make all countries involved worse off.